On Tuesday, March, 8th, USA President Joe Biden declared about the next powerful strike on Putin’s military machine. this strike is total rejection from Russian petroleum and gas imports. According to analysts’ opinion, the USA will try to force European allies to impose similar sanctions against Russia. This step can cause a split within the anti-Putin coalition.
“Today I proclaim that the United States are aimed at the main arterium of the Russian economy. We impose an embargo for all Russian oil, gas and energy sources. That means that Russian oil will no longer be able to arrive to the USA ports… American people gathered together for Ukrainian people’s support. We amde it clear that we will not participate in Putin’s war subsidizng” – Biden said.
How much Russian oil did the USA bought
Russia exports about 5 million barrels of crude oil per day, which is 5% of global consumption, and about 3 million barrels of petroleum products such as gasoline and diesel. Over 50% of this volume is delivered to Europe, about 20% – to China.
In 2021, the USA purchased an average of 200,000 bar of crude oil (4% of Russian exports) and 470,000 bar of petroleum products (15%) per day from the Russian Federation. However, in 2022, these volumes decreased significantly amid calls by American politicians from both parties to abandon Russian energy resources.
"The ban on oil imports from the Russian Federation is a necessary step, since the military treasury of Vladimir Putin depends on the revenue from the sale of energy resources," comments US Republican Senator Kevin Kramer. "Oil is Putin's weapon. Finally, the Biden administration acknowledged that it is turning energy into weapons. The ban on oil imports is aimed at depriving Putin of the financial fuel to wage war on Ukraine's freedom-loving people. "
Expectations of interruptions in energy supplies from the Russian Federation led to the fact that over the 13 days of the Russian-Ukrainian war, Brent crude oil rose by almost 40% from $94/bar on February 23 to $130/bar on March 8. Quotes approached the absolute maximum of $147/bar, set in 2008. Due to this price takeoff, the influx of oil dollars into Russia's military treasury increased, and the United States embargo will be ineffective if European consumers of Russian energy resources do not join it.
Pressure on Europe
In 2021, Russia earned $104 billion from raw oil export in Europe and the UK; $43,3 billion they received from gas selling. These data were published by the Belgium ecology organization Transport & Environment (T&E). They have criticized Europe for filling Putin’s pocket with $285 million daily for “black gold” supplies. Europe for filling Putin’s pocket with $285 million daily for “black gold” supplies.
“Every day, the EU sends almost a quarter of billion euros to Putin, who launched a war in Russia’s underbelly. We have to finish that. However, we cannot switch from Russian oil to Saudi Arabia oil. It is high time to electificise our transport and enhance its efficiency to reduce our oil consumption”, – William Todts, the T&E’s CEO, urged.
Europe buys almost 25% of consumed oil in Russia. The biggest importer is Germany spending 65 million per day and defeating its right to receive energy sources from Russia. Last week, Robert Habeck, the Minister of Economy and a Vice-Chancellor of Germany, opposed the embargo on Russian fossil fuels.
“We need these supplies for keeping stable prices and energy safety in Germany. Previously approved sanctions have already shown strong impact on German economy. We are affraid of harder effect” – Deutsche Welle reffers to Robert Habeck speech.
According to experts’ opinion, the largest economy of Europe affraids that Moscow can cut off gas supplies, that covers 60% of Germany’s needs. On Monday,Aleksandr Novak, the Vice Prime Minister of the Russian Federation has warned about it.
“Russia has a right to make a mirror decision and impose an embargo on pumping gas through Nord Stream-1, which is 100% loaded. We have not made this decision yet. Noone wins from it. However, European politicians push us to this step by their proclamations and accusations in Russian address” – tass.ru cites Aleksandr Novak’s words.
Dissention in anti-Putin coalition
The British Guardian emphasizes, that the USA has a possibility of rejection from Russian oil without any risk of power outage. We cannot say the same about the EU.
“Biden risks to bring a split to the Western anti-Putin coalition by imposing the oil embargo. Nevertheless, the UK’s promise to reject Russian energy sources by the end of 2022 means that the USA are not alone in lobbying this prohibition. Other European countries are clearly apprehensive. It is not surprising because the EU receives 40% of its gas and a bit more than a quarter of its oil from Russia” – the Guardian says.
This week, Netherlands and Hungary political leaders have joined German authorities in upholding the right to buy energy sources in Russia.
“Netherlands are ready to consider all possible sanctions for pressure on Russia, but the painful reality is European dependency from Russian. If we force European companies to stop importing, it can lead to the hard consequences”, – NL times refferes to thw ords of Netherlans Prime-Minister Mark Rutte.
Viktor Orban, the prime minister of Hungary made a similar statement. To his mind, although Hungary condemns the Russian invasion of Ukraine, he will not allow ordinary Hungarian families to pay the price of this war. “Spreading sanctions on the Russian energy sector will be unproportially heavy burden for Hungary because the majority of oil and gas import comes to Hungary from Russia. 90% of Hungarian families heat their homes by gas” – Orban noted.